‘Shipping security’ just another Jones Act myth

by Mark Coleman

Hawaii residents have been hearing over and over in recent months that the 1920 federal maritime law known as the Jones Act provides Hawaii with “shipping security.”But it ain’t necessarily so.In a new article published by the Grassroot Institute of Hawaii, “’Shipping security’ more Jones Act shibai,” research associate Jonathan Helton looked into that claim and found it to just another of the many myths that Jones Act supporters have been touting to keep afloat their favorite piece of special-interest legislation.

Helton wrote that Jones Act supporters have tried to buttress their “shipping security” claim by pointing to the recent port congestion along the US West Coast, where scores of ships were just sitting offshore, in some cases for weeks, waiting to unload their cargoes.

Meanwhile, shipping between the West Coast and Hawaii was mostly smooth sailing, with Jones Act supporters alleging it was because of the Jones Act, which restricts shipping competition between US ports to only ships that are US flagged and built, and mostly owned and crewed by Americans.

Apples-and-oranges comparison
Helton, however, determined that, “Comparing the Hawaii-mainland trade to the Asia-West Coast trade… is not an apples-to-apples comparison.” Among the differences:

– Last year, the ports of Los Angeles and Long Beach hit their highest cargo volumes ever. In 2021, LA and Long Beach each received more than 900 containerships, while only 248 visited Hawaii.

– The containerships visiting LA and Long Beach were much larger on average than those stopping in Hawaii: 75,899 and 82,925 gross tons, respectively, versus about half that size, 41,500 gross tons, for Hawaii.

– LA and Long Beach handle about 40% of the country’s freight, while Honolulu accounts for only a tiny fraction. In addition, Hawaii’s import volumes actually fell during the year due to the drop in tourism.

Meanwhile, West Coast harbors have experienced of shortages of trucking and rail capacity to move out the cargo that has already been offloaded.So yes, Helton wrote, “Hawaii has managed to avoid most of the supply-chain logjam.” But, again, not because of the Jones Act.

The not-so unique ‘dedicated terminals’Helton also tackled the argument put forth by Matson and Pasha — the two Jones Act carriers that dominate the West Coast-Hawaii market — that their “dedicated terminals” have protected Hawaii from shipping delays and logistics hurdles.

Such port terminals, however, also have nothing to do with the Jones Act. Nor are they unique, as claimed by Matson. Foreign shipping lines own several terminals across the country. At the Port of Los Angeles, for example, Danish shipping giant Maersk owns APM Terminals’ Pier 400.

Jones Act carriers never delayed?
Then there is the argument that Jones Act ships serving Hawaii “never, never get delayed,” as a top executive with the Hawaii Pilots Association recently stated.

In response, Helton listed examples of cargo ships being delayed for all sorts of reasons, whether mechanical, environmental or political, including the long strike by US dockworkers in 1970 that led to many product shortages in Hawaii.

“In the near future,” Helton wrote, “there’s the possibility of another maritime labor disruption, since the International Longshore and Warehouse Union’s contract with the Pacific Maritime Association, a maritime employer representative, ends in July 2022.”

If the union does go on strike and includes Hawaii, the Jones Act will have no say in how the negotiations turn out.

Foreign-flagged ships aren’t reliable?
“Finally,” Helton noted, “amid all the debate over the reliability of Jones Act carriers, it is important to remember that Hawaii is heavily dependent on international ocean carriers as well.

In fact, foreign-flagged vessels account for the majority of tonnage brought to Hawaii, including more than 23 million barrels of crude oil. If these foreign ships were so unreliable, why would Hawaii businesses ever use them?

“By some metrics,” he said, “their service is superior to that of Jones Act carriers, as foreign ships are often newer and offer lower shipping costs.“Moreover, as international events have recently emphasized, the Jones Act is actually a threat to Hawaii’s energy security, since the added costs of using Jones Act carriers to ship crude to Hawaii from US sources have incentivized the state to become almost wholly dependent on foreign oil imports.”

‘Shipping security’ just another Jones Act mythUltimately, Helton wrote, “the Jones Act has nothing to do with Hawaii’s ‘shipping security,’ nor the ‘dedicated terminals’ of its primary Jones Act carriers.”He concluded:

“Like so many other claims in favor of the Jones Act — that it provides 650,000 American jobs, protects US shipbuilding and national security, contributes to economic growth, provides benefits without affecting consumer prices, keeps foreign ships from traversing America’s inland waterways, protects America against terrorism, is a bulwark against China, and so on — this argument about the Jones Act providing Hawaii with “shipping security” is just another myth that needs to be sent to Davy Jones’ Locker.”

MARK COLEMAN is managing editor and communications director for the Grassroot Institute of Hawaii. Jonathan Helton’s article can be viewed by visiting the institute’s website at www.grassrootinstitute.org.